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WebMD Corp. (Nasdaq: HLTH) rose 0.72 to 8.34 Monday after the Internet health company said it will lose less money in the fourth quarter than previously thought.
Chief executive officer Martin J. Wygod said preliminary calculations show the loss before depreciation, amortization, restructuring and related expenses will be US$50 million to $55 million, rather than the $60 million to $65 million previously estimated.
"These results are attributable to a more rapid implementation of our integration and consolidation initiatives," Wygod said. There will be "significant, non-recurring charges" in the quarter, relating to the company's consolidation efforts, he added.
WebMD is examining its products and partnerships, and is disposing of or restructuring less profitable deals. The company recently reshuffled a joint venture with News Corp. in a bid to cut costs and maximize future profits.
WebMD said that move will result in a $275 million charge to fourth-quarter earnings, but lets the company retain the rights to $205 million in domestic media services over 10 years and gain full control over its international operations. WebMD will continue to provide content to News Corp. in exchange for $48 million over four years.
The company also recently ended an alliance with DuPont as part of the plan.
Wygod said sales and earnings at the company's Porex subsidiary had "softened." The division, which provides plastic technologies, has been treated as a discontinued operation since September of 2000 and is being "disposed of" in a manner "designed to maximize the benefit to WebMD," Wygod said.
WebMD, based in Elmwood Park, New Jersey, uses the Internet to link doctors,
insurance companies and others involved in the health system.
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